Release Date: March 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sigma Lithium Corp (SGML, Financial) achieved a 28% increase in production in the fourth quarter, reaching over 77,000 tons, marking their highest quarterly production to date.
- The company reported a robust financial performance with a 42% cash gross margin and a 26% adjusted EBITDA margin in the fourth quarter.
- Sigma Lithium Corp (SGML) has maintained a strong safety record, achieving over 600 days without a lost-time injury.
- The company has a healthy liquidity position with $46 million in cash, supported by improved working capital efficiency.
- Sigma Lithium Corp (SGML) is on track with the construction of Plant 2, which is scheduled for commissioning in the fourth quarter of 2025, promising future production increases.
Negative Points
- The company faced technical difficulties during the earnings call, which may have affected the clarity of communication.
- There is uncertainty regarding the impact of not achieving the projected 270,000 tons of production in 2025, which could affect cost structures.
- Sigma Lithium Corp (SGML) is dealing with inventory absorption issues in the market, affecting pricing dynamics.
- The timing of the first loan disbursement from BNDS has been delayed, which could impact financial planning.
- There are concerns about the accuracy of financial expense calculations, as discrepancies were noted during the call.
Q & A Highlights
Q: If Sigma Lithium does not achieve the projected 270,000 tons of production in 2025 and instead produces 240,000 tons, how will this affect the per ton costs, including all-in sustaining costs and CIF China costs?
A: Ana Cabral-Gardner, CEO, explained that if production falls to 240,000 tons, costs would resemble those from the second quarter of the previous year, excluding one-off items that increased costs in the third quarter. The company has already experienced such scenarios and has strategies to actively decrease costs, primarily through reducing short-term debt.
Q: Given the current market conditions, how does Sigma Lithium view the pricing interplay between lithium carbonate and spodumene, and should spodumene prices be expected to follow carbonate prices if they remain stable?
A: Ana Cabral-Gardner, CEO, noted that current price levels are influenced by inventory levels rather than demand, which remains robust. The depletion of inventories will eventually lead to a supply-demand-driven pricing environment. The company anticipates that as inventories are absorbed, pricing will stabilize closer to current levels.
Q: When does Sigma Lithium expect to receive the first loan disbursement from BNDS, and has the process taken longer than anticipated?
A: Ana Cabral-Gardner, CEO, stated that the first disbursement is expected around mid-year. The BNDS operates on a reimbursement basis, requiring Sigma to submit documentation of expenditures for evaluation before funds are disbursed.
Q: Can you clarify the financial expenses per ton, as there seems to be a discrepancy between reported figures and calculations based on quarterly numbers?
A: Ana Cabral-Gardner, CEO, acknowledged the discrepancy and offered to provide exact numbers later. She highlighted that interest payments for a $50 million loan from Citibank were made in the third quarter, affecting reported figures. The company is transitioning from higher-cost short-term debt to lower-cost long-term debt, which will benefit future financial expenses.
Q: Are there any trends or initiatives in ocean or road freight that Sigma Lithium is pursuing to improve costs?
A: Ana Cabral-Gardner, CEO, mentioned significant opportunities in ocean freight. The company has started using larger vessels, such as supermax ships, which offer cost efficiencies by reducing the cost per ton compared to smaller vessels. This strategy is expected to improve shipping costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
